Amazon, the world’s biggest online shop, is finally here, and although it’s been an inauspicious start, with a limited range and surprisingly higher than expected prices, make no mistake — it means business.

Local retailers who have breathed a sigh of relief this week may be thinking differently in a year or two when Amazon is fully up and running in Australia.

Which begs the question: If you’re in Amazon’s headlights, what can you do?

For Warren Buffett, arguably the world’s shrewdest investor, the solution is simple.

Retail is not just about price, it’s about customers. And don’t just satisfy your customers, delight them.

As Mr Buffett told a business symposium in New York:

“Tomorrow morning, when you look in the bathroom mirror, just put in lipstick, or whatever, on the mirror, just put, ‘delight my customer’.”

And the man affectionately known as the Oracle of Omaha should know.

Mr Buffett took over Berkshire Hathaway in 1964 and has turned it into a company which is now worth more than $600 billion.

Each Berkshire Hathaway share trades at $387,000 (and that’s not a misprint!!).

He’s clearly delighting his customers.

Berkshire knows how to run a shop

What separates Berkshire Hathaway from most investment companies, though, apart from its outstanding performance, is that it doesn’t just buy shares, it buys whole businesses, including many retailers.

It knows how to run a shop. Berkshire Hathaway’s portfolio currently includes food, sports goods, shoes, furniture, and fashion.

“Any business that has delighted its customers has a sales force out there that they don’t have to pay,” said Mr Buffett.

“You don’t see them, but they are talking to people all the time.”

Surprisingly in the current Australian context, for Mr Buffett, exhibit A is Amazon.

“The classic example is Jeff Bezos (Amazon founder),” said Mr Buffet.

“Here’s a fellow that 20 years ago had a very small business, but he set out every day to delight his customers by fast delivery and lower prices.”

Two decades ago there was no guarantee that Amazon would become the behemoth it is today.

In a world in which using the internet for business was relatively new, and the bricks-and-mortar retailers were the giants, intent on crushing all their rivals, Amazon started out as a bookseller, hoping that great service and low prices would carry the day.